My Treasury colleagues and I have received 110 written representations on this subject since 27 January.

Mr. Mitchell

As the Secretary of State for Social Services announced last week that there would be provision in the Finance Bill for VAT relief for contracted-out services to the Health Service, will the hon. Gentleman confirm that there is no administrative reason why charities should not have VAT relief as well?

I cannot confirm that. There are formidable technical and administrative problems in meeting what I know is a widespread view in the House and which is represented by the early-day motion on the subject, which bears many signatures.

Is my hon. Friend aware that more than 150 major charities now support that campaign? Will he do something to remove the obduracy of Customs and Excise, which is preventing those changes taking place and preventing the removal of a tax that should never have been imposed on charities in the first place?

I assure my hon. Friend that it is not the obduracy of Customs and Excise or any civil servant, but
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the judgment of my right hon. and learned Friend the Chancellor of the Exchequer and his colleagues that determines this issue.

Is there not a stark contrast between the administrative problems that are being solved by the Treasury to allow their friends who finance the Tory party to obtain relief on VAT when they provide contracted-out services to the Health Service and the Government's attitude to charities, which are working for other people but, apparently because of administrative difficulties, cannot possibly be given VAT relief? Does that not demonstrate double standards?

If it is the judgment of my right hon. and learned Friend the Chancellor and his colleagues that determines these issues, in what way is it equitable for the private contractor who provides cleaning, laundering or catering services to a National Health institution to be considered more important than the charities that provide an identical service and on whom VAT is charged?

The interest of my right hon. Friend the Secretary of State for Social Services in bringing more efficiency and value for money into services that may be contracted out of the Health Service is wholly dissimilar from the case that is made by the charities.